Oil product stockpiles at the UAE’s Port of Fujairah have declined to a three-year low, with all categories showing dwindling supplies.
The total inventory was 16.284 million barrels as of Sept. 13, down 11.8% from a week earlier and the lowest since Aug. 27, 2018, according to data from the Fujairah Oil Industry Zone provided exclusively to S&P Global Platts on Sept. 15.
Light distillates, such as gasoline and naphtha, plunged 14.9% to 4.897 million barrels, the lowest since Oct. 26, 2020, when they were at a record low of 4.198 million barrels. Heavy distillates, including fuel oils used in power generation and marine bunkers, dropped 14.4% to 7.471 million barrels, the lowest since March 22.
Some 240,000 barrels of gasoline were headed to Kuwait from Fujairah in the week started Sept. 6, only the second such shipment this year, according to commodity data company Kpler. Traders have also been sending more gasoline to Yemen in recent weeks.
Marine bunkers have also been in demand at Fujairah lately, with August sales the highest this year, data released separately by FOIZ showed. Total fuel oil exports in the week started Sept. 6 rose to 3.31 million barrels, the most since July 19, according to commodity data company Kpler. Fuel oil shipments were headed to Kuwait, Sri Lanka and Pakistan, according to the data. Pakistan is likely to import more fuel oil as the country looks to cushion the shock from surging LNG prices at a time domestic appetite for fuels from the industrial sector is growing fast due to improving economic growth prospects, according to sources and analysts.
HSFO for marine bunkering is being squeezed the most, while LSFO is plentiful, traders said.
The drop in heavy distillates may be due to more loading of bunker fuels from landed storage tanks to barges, a bunker supplier said. “Bunker sales in September have been quite lackluster, and support from the tanker segment in August is non-existent this month,” a trader said.
The trader also said that supplies of very low sulfur bunker fuel are ample as refineries at Fujairah continue to operate at almost full capacity, which has reduced premiums of Fujairah-delivered 0.5%S marine fuel.
Platts data showed that the premium of Fujairah-delivered 0.5%S marine fuel averaged $1.72/mt over FOB Singapore Marine Fuel cargo assessments on Sept. 14-15, down from the average of $2.05/mt in the same period a week ago.
Availability of high sulfur fuel oil bunkers has been tight and is likely to remain that way towards the end of September,” another bunker supplier said.
Middle distillates stocks stood at 3.916 million barrels as of Sept. 13, down 1.7% week on week and the lowest in two weeks.
Total stockpiles are down 30.16% since this time last year, led by a 44% drop in heavy distillates. Light distillates have slipped 20.62% while middle distillates are up 2.9%.
Source: Platts